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Quarterly Report September 2015 Quarterly Report‌


Guildford Coal Limited ('Guildford' or the 'Company') (ASX: GUF) is pleased to present its quarterly activities report for the period ended 30 September, 2015.


HIGHLIGHTS‌


Corporate Strategy and Operating Environment


As a consequence of continuing weak global market conditions during the Quarter, volatility in the resource market has become the norm. This continues to present significant economic and funding challenges for Guildford Coal.


In the face of these challenges, the Company has remained focused on delivering both the corporate and operational recommendations of the strategic review of the Company which was completed in early 2015.


A critical aspect has been the focus and delivery on actions that restructure the finances to reduce the debt burden and update the terms through exploring alternative funding options. The Company continues to maintain a strong and supportive working relationship with existing financial backers to allow requisite time to complete this restructure.‌


An important step to delivering this critical element of the strategy is obtaining approval from shareholders to secure time to progress the debt restructure. An Extraordinary General Meeting (EGM) of shareholders was announced for 30 October, 2015 for shareholders to consider an extension of time for making certain payments under the existing Convertible Notes and the Amortising Notes which were previously due on 8 July 2015 to no later than 31 October, 2015 as well as an extension of the Maturity date for the Convertible Notes to 8 December 2015.‌


The Company has announced its intention, subject to shareholder approval, to undertake an exciting rebranding involving a name change to TerraCom Limited and the belief is that this name far better reflects the strategic direction and focus to transition to a dynamic energy and resources company.


Guildford also continues to investigate the merits and mechanisms for a potential listing on an Asian stock exchange, a crucial recommendation of the strategic review. A regional hub in Singapore is providing logistics support to the Company.


As part of our cost reduction drive, the Brisbane corporate office in Queensland, Australia was closed in July, 2015 and relocated to Townsville. This resulted in a reduction in staffing levels.


Operations - Mongolia BNU


Safety

Our operations continued to deliver strong health and safety performance with the BNU Coal Project continuing its very impressive safety record of No Lost Time Injury (LTI) since inception. The project has now recorded over 1.3 million man hours without an LTI. Our proactive approach to intensive health and safety training combined with robust systems and a multi-layered risk management process is ensuring we continue to protect our employees from any harm.

Production

Our operations team continued to ramp up production at the BNU Coal Project with a focus on achieving the target 1.5Mtpa annualised production rate during Q4 2015. The overburden stripping in advance of production from BNU Pit 2, which includes the micro-basin previously announced on the 22nd of July 2015 was completed successfully in the September Quarter.


Figure 1- Coal Face BNU Pit 2



Figure 2 - CAT 6030 Excavator loading CAT 777D trucks stripping overburden from Pit 2


Initial coal production commenced from Pit 2 in July 2015 ramping up through the quarter.


Figure 3 - Coal production from Pit 2 during the Quarter



Figure 4 - Coal cropping in the Low Wall of Pit 2, coal mining in the background


Production from the initial Pit (Pit 1) has been put on hold in order to reduce overall production costs during the tough market conditions.


Figure 5 - BNU Pit 1 nearing completion in September 2015

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